In 2015, the NVAR Standard Forms Committee removed the paragraph pertaining to electronic signatures that previously was included in the Residential Sales Contract.  What does this mean for your transactions?

Q.  Can my client still sign the contract electronically?
A.  Of course! The Uniform Electronic Transactions Act (UETA) and the Electronic Signatures in Global and National Commerce Act (ESIGN) provide that a document cannot be denied legal enforceability simply because it is in electronic format. Virginia has adopted parallel laws..  

Q.  Since the language in the contract is gone, how do my clients state that they agree to use electronic signatures in the transaction?
A.  Both the federal and Virginia laws provide that the act of signing a document electronically shows that a client agrees to the use of electronic signatures. If your client accepts your request for electronic signature, and then signs the document electronically, he has indicated that he agrees to the usage of electronic signatures for that particular transaction. The statute provides: “This chapter applies only to transactions between parties, each of which has agreed to conduct transactions by electronic means. Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties' conduct.” VA Code Ann. § 59.1-483 (b)

Q.  Certain software companies have developed electronic signatures as part of their package.  Are those valid?
A.  Rather than go through each vendor’s product to assess whether their electronic signature process is compliant, we recommend that you use one of the Realtor® approved systems. NVAR provides our members access to Instanet’s Authentisign products at no cost. These products have been vetted and allow you and your clients to use electronic signatures knowing that you will do so in compliance with the relevant Virginia and federal laws.

Q:  What if the other party in the transaction refuses to sign electronically?  Does that make my client’s electronic signatures invalid?  Must it be all or none?
A. If the other party refuses to use electronic signatures for her own signature, your client’s signature remains valid and your client may continue to use electronic signatures during the course of the transaction. If, however, the other party requests that your client resubmit the offer or the signed contract with a “wet signature,” then that signifies that the other party does not wish to proceed in a transaction with any electronic signatures. Your client at that point would have to decide whether to proceed with the transaction knowing that “wet signatures” would be required throughout the transaction.  

Q:  What if my clients start a transaction using “wet signatures,” but then decide they want to start using electronic signatures?
A. Your clients may change their minds at any time during the transaction by simply using an electronic signature.  The converse is also acceptable.  If your clients submit an offer with an electronic signature, they may switch and use a “wet signature.”